I won’t disagree with your thoughts on Boeing’s executive culture being more concerned about this quarters earnings reports and the current stock price. Boeing is no different in this regard than a significant, and growing number of other large American corporations.
I do think you are missing a key piece in your assessment of why Boeing choose to refresh a decades old design vs coming up with something new, however. Boeing’s customers did not and do not want a new design. Southwest, and the other major 737 carriers lobbied Boeing and the FAA to ensure that the next generation aircraft would share a common type rating and thus a common training infrastructure with their current fleet. A fancy new mid-range aircraft with all the latest bells and whistles, while possibly more comfortable, easier to fly, and safer would necessitate a loss of the economies of scale and all of the other benefits of a single (or limited) fleet. Like almost all manufacturers, Boeing is producing the product that its customers want to buy.
It's a fair point you make, and it provokes more thought too.
I think your argument stretches a long way, but not all the way. Because innovation isn't just about delighting customers with what they want. It's about giving them something they couldn't want because they couldn't even imagine it yet. While JVC was giving customers what they wanted by building a better CD player, Apple was digitizing music and building the iPod. So I don't think Boeing can rest its case purely on feeding the customer base.
But ... I am aware my argument is also limited by the context of technological progress and discontinuity. Maybe we're reaching something like the tech ceiling of passenger aviation, and if that's the case, there is no true innovation left to be had. In which case building upon a prior design makes a lot of sense.
Great comment, and I really appreciate you reading and engaging.
I hope this story ends differently, and that Boeing can restore itself as a leader in the world aero market.... but just add you failed to present a rosy conclusion, I am also unable to see this as a realistic outcome. Without dead Americans involved, I think this one will disappear. Boeing hands politicians money, and politicians will again hand Boeing a pass.
Thanks for sharing this Stuart -- it's an insightful share and I have not yet read this book. You've prompted me to order it today. I've always questioned the lionizing of Jack Welch. Seems there's a lot to unpack about that.
I won’t disagree with your thoughts on Boeing’s executive culture being more concerned about this quarters earnings reports and the current stock price. Boeing is no different in this regard than a significant, and growing number of other large American corporations.
I do think you are missing a key piece in your assessment of why Boeing choose to refresh a decades old design vs coming up with something new, however. Boeing’s customers did not and do not want a new design. Southwest, and the other major 737 carriers lobbied Boeing and the FAA to ensure that the next generation aircraft would share a common type rating and thus a common training infrastructure with their current fleet. A fancy new mid-range aircraft with all the latest bells and whistles, while possibly more comfortable, easier to fly, and safer would necessitate a loss of the economies of scale and all of the other benefits of a single (or limited) fleet. Like almost all manufacturers, Boeing is producing the product that its customers want to buy.
It's a fair point you make, and it provokes more thought too.
I think your argument stretches a long way, but not all the way. Because innovation isn't just about delighting customers with what they want. It's about giving them something they couldn't want because they couldn't even imagine it yet. While JVC was giving customers what they wanted by building a better CD player, Apple was digitizing music and building the iPod. So I don't think Boeing can rest its case purely on feeding the customer base.
But ... I am aware my argument is also limited by the context of technological progress and discontinuity. Maybe we're reaching something like the tech ceiling of passenger aviation, and if that's the case, there is no true innovation left to be had. In which case building upon a prior design makes a lot of sense.
Great comment, and I really appreciate you reading and engaging.
I hope this story ends differently, and that Boeing can restore itself as a leader in the world aero market.... but just add you failed to present a rosy conclusion, I am also unable to see this as a realistic outcome. Without dead Americans involved, I think this one will disappear. Boeing hands politicians money, and politicians will again hand Boeing a pass.
I would add to „too big to fail“ this story. The „GE virus“.
https://www.amazon.com/Man-Who-Broke-Capitalism-America_and/dp/198217644X
Thanks for sharing this Stuart -- it's an insightful share and I have not yet read this book. You've prompted me to order it today. I've always questioned the lionizing of Jack Welch. Seems there's a lot to unpack about that.